UK Government to Scrap Gas Standing Charges by 2027

The move, outlined in the upcoming Budget, will shift fixed costs onto the unit rate, a change the Treasury says could save 60 % of households an average of £45 per year on their energy bills. Targeted mitigation measures for a small number of vulnerable households will also be introduced.

The Independent

Under the current energy price cap, the average annual gas standing charge is £108, payable regardless of consumption. Critics have described the charge as “unfair and outdated”, arguing that it adds a constant cost even when households use little or no gas. The proposed reform aims to make the energy system “fairer” by removing this blanket fee.

The Independent

Chancellor Jeremy Healey, delivering his first Budget, framed the reform as “breathing space” for families and a step toward a more equitable energy market. Prime Minister Andy Burnham echoed the sentiment, calling the abolition “basic fairness” and pledging to give people more control over their bills. In a pre-Budget video, Healey highlighted global conflicts and domestic cost-of-living pressures as drivers of the decision, while noting signs of economic resilience such as rising investment and productivity.

The Independent

If the reform proceeds as planned, the Treasury estimates that 60 % of households could see an average annual reduction of £45 on their energy bills. By embedding the fixed cost into the unit rate, the change is intended to protect consumers from price spikes tied to global energy markets. The Treasury also signaled that additional support will be directed toward the poorest households, though details of that targeted mitigation remain to be outlined.

The Independent

• “I am determined to reform our broken energy market, so it better serves the public interest.” — Mr Healey

The Independent